With the stock market again flirting with record highs, investors want to know if their portfolios can keep climbing the proverbial wall of worry or whether the recent gains have been a last gasp before headline risks kick in and the next downturn starts.
It’s a fair question in a market that has largely performed to analyst expectations only if you measure prognostications by their beginning and end points.
Plenty of analysts expected the market to be near peak levels by mid-year, but no one was calling for the bumpy ride that stock market has actually seen.
The S&P 500’s roller coaster ride this year has left many scratching their heads, wondering what may happen next. Many on Wall Street are revamping their S&P 500 targets, including two long-time technical analysts who recently shared their updated forecast.
Technical analysts see reasons why the S&P 500 could continue to rally in 2025.Bloomberg/Getty Images
The Standard & Poor’s 500 Index entered 2025 at 5,868 and peaked on February 19 at 6,144; it then proceeded to give back nearly all of that gain by the time April rolled around. But after President Trump’s so-called “Liberation Day” – when he announced sweeping tariff plans that rattled the markets – the index lost another 15% in a matter of days, setting a new low on April 8 at 4,982.
The market then began to grind its way back; a month after Liberation Day, on May 2, it had recovered the full measure of the decline triggered by the tariff announcement. By May 13, the S&P 500 was in positive territory for the year.
Since then, it has ground higher, crossing 6,000 on June 6; that – and the record of 6,144 – was where a lot of market observers expected to see resistance, where a market that failed to break through could fall back, potentially all the way back to the April lows.
While news events don’t become part of the S&P 500 chart until they show up in prices, they do factor into what market technicians think can happen next. Technical analysts can cite legitimate concerns about a potential economic slowdown, sticky inflation, uncertain tariff policies, geopolitical tensions around the world and more.
Those headlines cast a shadow over the market, which has market technicians looking for a breakthrough to confirm that the recent bounce-back isn’t just a bear market rally.
Two prominent technical analysts have made it clear that they expect the rally to hold, with new record highs coming any day now.
Adam Turnquist, chief technical strategist at LPL Financial, says that investors see the messy economic backdrop and figure it’s not conducive for a rally to new highs.
Focus on the technicals and rely on history, however, and Turnquist says a different picture emerges.
For starters, bottoms are a process where the market hits lows and then tests them repeatedly, but the April downturn was V-shaped, steep and fast down but with a hard bounce and no-retest of the downturn.
There is reason to believe in the upside, Turnquist says. In an interview on “Money Life with Chuck Jaffe,” Turnquist noted that LPL research shows that over the last 75 years, when there is a meaningful new high three months after the last high was set, momentum tends to keep rolling, and the average return for the index over the ensuing 12 months is nearly 10 percent.
“We can’t discount the fact that we have a lot of trade uncertainty,” Turnquist said. “Yes, we’re past peak policy uncertainty when it comes to trade, but still very elevated, still a lot of headline risk. We talk about the deficit as well. There’s risk there.”
Turnquist said if the market struggles to break through to new highs, a lot of analysts will call for a double-top and expect a fall back to at least the 5,400 level on the S&P 500. That’s a 50% retracement on the rally, and it overlaps with some of the lows from last September.
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For that reason, Turnquist expects the market to find “a confluence of support around those levels,” but that’s not the move he’s calling for. Instead, he called this “a market where you want to be buying dips and not selling rips right now.”
He’s not the only technical analyst who foresees those rips and new highs. Matt Fox, president of Ithaca Wealth Management, said in an interview on the June 17 edition of Money Life that the sell-off in April did a lot of the “technical damage” necessary to set up a rally.
He said he now has a 7,000 target on the S&P 500, meaning a gain of roughly 20% in the next 12 months.
“The momentum has been strong, and we have seen a lot of great participation across sectors,” Fox said. “It’s not just a handful of stocks that has driven this rebound from the April tariff lows; it has been the entire market. I think that’s a good sign that not only will we test those new highs but we will keep on going up and keep on making new highs for the foreseeable future.”
Fox said the current charts are particularly strong, noting that he sees a lot of cup-and-handle patterns indicating stocks on the verge of a breakout.
“It seems like we are in this sweet spot where the charts are lining up perfectly as the fundamentals are improving, and that can lead to some explosive moves,” Fox said, noting that the conditions he sees in current charts remind him of 2013, a year in which the S&P 500 gained nearly 33%.
“This is reminiscent of that,” he said. “I’m worried to come off as too bullish, but I think it’s hard not to be pretty constructive on the market going forward.”
